On October 4, 1993, according to court records, Willis Carto received a letter signed by four senior staff members of The Journal of Historical Review ( Thomas Marcellus, Mark Weber, Ted O’Keefe and Greg Raven) announcing that the IHR was “firing” him. Although Carto, in a court document, contended that he had “no inkling of their conspiracy to take over,” trouble between Carto and his staffers reportedly had been building for some time. Carto’s reputed highhandedness towards his employees and associates appears to be the primary reason for his ouster, in addition to several reasons listed by Marcellus in a court declaration, including: Elisabeth Carto’s purchase of a new Cadillac with IHR funds; Carto’s frugality in taking out an insufficient insurance policy (a 1984 fire had destroyed the IHR warehouse and offices and the $50,000 insurance policy purchased by Carto covered only a fraction of the damage); his skimping on pay and health benefits; and his “launching and subsequent mishandling of the reward offer” in the Mel Mermelstein affair.
Marcellus asserted, moreover, that the primary point of contention rested on the editorial direction of The Journal of Historical Review. To the editorial staffs dismay, Carto allegedly wanted to reduce Holocaust denial features — the publication’s stock in trade — by 80%, eventually to abandon the issue along with the name of the journal entirely. Furthermore, Marcellus accused Carto of trying to turn the journal into a “racist” and “Nazi” publication — as if the IHR’s Holocaust-denial agenda weren’t inherently anti-Semitic and pro-Nazi from the outset. Carto, of course, denies the allegations against him and insists that the rebellious staff members were manipulated by “sinister forces,” as he put it in a letter to Holocaust denier Arthur Butz. This letter was included in a mailing from Carto to IHR contributors and contained attacks on ADL and Mel Mermelstein.
In light of the tension between Carto and the staffers, Marcellus and O’Keefe decided to take the issue to the board of the Legion for the Survival of Freedom, Inc., IHR’s parent organization. According to the Los Angeles Times (May 8, 1994) Marcellus described their decision in a court declaration:
“Having suffered Carto’s machinations, hair-brained [sic] schemes, mismanagement, insults and irrationality long enough, the senior staff met to determine the course of action to stop Carto from taking harmful actions.”
It was alleged that the Legion for the Survival of Freedom, Inc., had listed a corporate director who had been dead for five years; that the board had never met, and that Willis Carto was the sole and controlling voice in the corporation.
Most importantly, at stake in this controversy was over $10 million in stock certificates bequeathed to the Legion by Jean Farrel, the granddaughter of Thomas Edison. The summer before the October “coup,” Marcellus reportedly discovered a $100,000 bank order for Carto’s Liberty Lobby, drawn from the Jean Farrel bequest. According to Marcellus, Carto directed his wife to set up a corporation for the sole purpose of controlling the money and loaning it back to the Legion — thus making the Legion a less attractive target for potential lawsuits. Because the IHR advertised itself as the Legion, the senior staffers demanded control of the money Mrs. Farrel had bequeathed to the parent company.
After discovering and exposing Carto’s alleged business improprieties, the staffers and their lawyer, William Hulsy, reportedly convinced two elderly directors of the board of the Legion to resign. The remaining third member, Thomas Kerr, appointed a new board which subsequently voted to terminate all association with Carto. Kerr later contended that he was “misled as to the facts” by the rebel staffers, and later rejoined the Cartos in a suit against the Legion.